Jaguar Land Rover to cut output at UK car plant after warnings on Brexit, diesel

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LONDON (Reuters) - Britain’s biggest carmaker Jaguar Land Rover (TAMO.NS) said it will go down to a three-day week at its Castle Bromwich plant in central England just days after its boss warned about the impact of Brexit and diesel policy on manufacturing.

FILE PHOTO: Jaguar cars are seen parked in rows at the Castle Bromwich plant in Birmingham, Britain, January 19, 2009. REUTERS/Darren Staples/File Photo

The Castle Bromwich facility will operate a three-day week from October until the beginning of December in a move which will affect around 1,000 staff but avoid job cuts, a spokeswoman said.

“In light of the continuing headwinds impacting the car industry, we are making some temporary adjustments to our production schedules at Castle Bromwich,” the company said in a statement.

Last week, the firm’s boss Ralf Speth warned that the wrong Brexit deal could cost tens of thousands of car jobs and risks production at the firm, especially if there are delays at ports and on motorways due to customs checks.

He also said that the government had demonized diesel cars, contributing to 1,000 job losses at the company earlier this year.

Conservative lawmaker and Brexit supporter Bernard Jenkin earlier on Monday accused Speth of “making it up” when asked about the automotive boss’s comments, which included a warning that it was already more attractive to build cars abroad with Brexit adding uncertainty.

The Unite union blamed Prime Minister Theresa May as she battles to convince many of her own members of parliament to support her Brexit proposals which she says will maintain frictionless trade and protect jobs, but have angered many Brexiteers.

“This is the continuing effect of the chaotic mismanagement of the Brexit negotiations by the government which has created uncertainty across the UK’s automotive industry and the manufacturing sector generally,” said Assistant General Secretary Tony Burke.

A slump in demand for diesel cars is also having a big impact on the firm.

About 90 percent of Jaguar Land Rover’s (JLR) sales in Britain are diesel models, which compares with around 45 percent globally, the company said earlier this year.

Diesel sales have fallen this year nearly 30 percent in Britain, Europe’s second-biggest car market, mirroring similar drops in other major markets, as governments crack down on the segment in the wake of Volkswagen emissions scandal.

JLR said on Monday it was investing to protect its plants in the future.

“We have invested more than £4bn since 2010 to future proof manufacturing technologies to deliver new models,” its statement said.